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Greece Financial


Introduction of Greece

Population: 11.2 million (UN, 2009)

Capital: Athens
Major Language: Greek
Major Religion: Christianity
Monetary unit: 1 euro = 100 cents
GNI per capita: US $28,650 (World Bank,2008)
Inflation rate: 1.2% (2009)
Unemployment rate: 9% (2009)
Greece is the 15th largest economy in the 27 member EU
Greece is ranked 29th in the world at $27,875 nominal GDP
33rd in the world $27,624 for purchasing power parity(PPP)
Greece is a member of EU, WTO, OECD, BSECO

Introduction of Greece
Greece, a Parliamentary Republic
Prime Minister, George Papandreou
Capitalist economy with the public sector
accounting for about 40% of GDP
Member of EU
Greece joined in 1981
In 2001, 12th member of the European
Economic and Monetary Union

Financial crisis of
The worst financial crisis since the Great Depression of the 1930s
Threat of total collapse of large financial institutions
The bailout of banks by national governments
Downturns in stock markets around the world
Housing market also suffered, resulting in evictions, foreclosures and

Reasons for Greece

Financial Crisis
Democratic government,
Socialist population
Welfare schemes
Hiring of more Government jobs
Increase in Government employees Salary
Evasion of tax
High taxes leads to high tax evasion
Loosing 30 billion Euros per year
36.6% of the gross government revenue

Reasons for Greece

Financial Crisis
Government spending focused on consumption expenditure
Greek government expenditure approximately 104 billion Euros
which is equal to 49% of the GDP
Large spending on Interest payment
20% of government revenues diverted into long term investment
Fraudulent Government and Fiscal Indiscipline
Accumulated debts
Secretly borrowing from Private and foreign investors to hide
Because of government borrowing supply for the private sector

Unemployment Increas
The industrial production was low
In 2011- unemployment rate gone to 15.9%

Impact on European Un
The crisis has reduced confidence in
other European economies
Financing needs for the euro zone in
2010 come to a total of 1.6 trillion
Ireland, with a government deficit in
2010 of 32.4% of GDP, Spain with 9.2%,
and Portugal at 9.1% are most at risk.

Impact on US
U.S. exports to the EU could be impacted
if the crisis slows growth In the EU and
causes the euro to depreciate against the
As the crisis continues, increased
perceptions of risk are impacting U.S
financial markets.
The panic in Greece caused one of the
most turbulent days ever on Wall Street. In a
matter of minutes, stocks plunged 900 points.
The Dow managed to recover but still
ended in negative territory, The Dow closed
down 347 points.

Impact on India
Greek imports from India include cotton,
synthetic fibres, fabrics, vehicles, iron, steel and
While Greek exports to India include fibers,
fertilizers, organic chemicals, pharmaceutical
products, leather goods, metal processing
machinery, etc.
Only 0.05% of India's exports go to Greece and
Indian banks have virtually no direct exposure
to Greece.
Euro which was quoting at around Rs.67 before
crisis is way below at Rs.55.92 currently.

What Greece implemented
Raise taxes on fuel, tobacco, and alcohol
Raise the retirement age by 2 years
Decrease government spending


Decrease Unemployment
Fix Inflation Rates